She said that the oil flowing through the 986-kilometer (611 mile) twin pipeline from Kirkuk, was being used to fill up reservoir tanks at the port of Ceyhan, on the Mediterranean Sea, and was not being exported.

"We are receiving between 380,000 to 530,000 barrels of oil per day, compared to the previous amount of 900,000 to one million barrels per day," she added.

Iraq had stopped pumping oil and effectively exporting its crude both through Ceyhan and the Iraqi port of Mina al-Bakr on Friday following a pricing row with the United Nations, which allows sanctions-hit Baghdad to sell limited oil under an oil-for-food programme.

Iraqi officials are demanding that buyers for their crude pay a surcharge of 50 US cents per barrel from December, and that the extra money be paid to banks not controlled by the United Nations.

The UN maintains the demand would amount to a violation of the sanctions regime, imposed following the Iraqi invasion of Kuwait in 1990, as the premium would be paid directly to Baghdad and not to UN-controlled accounts.

Iraq has been exporting an estimated 2.4 million barrels of oil a day, almost all of it through the Turkish terminal. World demand for oil is currently 76 million barrels a day.

The UN official responsible for Iraq's oil-for-food program, Benon Savan, said Monday that the conflict could be resolved if both parties remained flexible.—AFP.